On the evening of October 11th, Vanke (000002.SZ) announced the adjustment of its organizational structure to further strengthen the construction of centralized organization in its development and operation business. Specifically, the development and operation headquarters will further immerse itself in the business front line, directly taking charge of the management of product origins and the operation of major projects, while some regional headquarters will streamline their functions or implement mergers.
Regarding the aforementioned changes, Vanke stated to reporters that the company conducts a routine organizational review and corresponding optimization every year to better adapt to changes in the situation and development needs. "The further centralization of this organizational structure will help to enhance the operational efficiency and benefits of projects, especially in concentrating efforts on key projects. Against the backdrop of various policies supporting market stability being introduced one after another, it will also help the company better seize the market opportunities brought by these policies."
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It is worth noting that in this adjustment, the Shanghai Company and Guangzhou-Foshan Company have been restructured to be directly managed by the development and operation headquarters. According to Vanke, the Southern Region's sales during this year's National Day holiday exceeded the total sales of the entire month of September, with the transaction amount in Guangzhou-Foshan nearing 3 billion yuan.
Organizational Structure Centralization
Recently, Vanke, which is fully committed to "slimming and strengthening," has made adjustments to its organizational structure to reinforce development and operation. Reporters learned that in this adjustment, Vanke repositioned the East China Region, Southern Region, Beijing Region, Southwest Region, and Central China Region as "forward command centers" dispatched by the development and operation headquarters, setting up only business functions directly related to projects and no longer setting up back-end support functions. At the same time, the Northeast Region and Northwest Region have been restructured into the headquarters company, which only sets up a set of management functions to manage various city projects within the region in a centralized manner; companies with many major projects and large production value, such as the Shanghai Company and Guangzhou-Foshan Company, are directly managed by the development and operation headquarters, strengthening professional control over resource revitalization, operational efficiency, delivery quality, and cost management.
Furthermore, to further improve the operational efficiency of commercial and office assets, Vanke's development and operation headquarters will establish an office business department, focusing on improving the efficiency of office asset operations, while deepening the organizational construction of the commercial business department. In the future, the commercial business department will focus on the development of three core product lines: large shopping centers, community commerce, and historical and cultural blocks. First-line projects will be merged into seven regional companies to be closer to local markets and customers, focusing on in-depth project development.
In terms of personnel arrangements, Vanke's adjustment still maintains the original core team unchanged. The development and operation headquarters are still overall responsible by Zhang Hai, Sun Jia continues to serve as the head of the commercial business department, and Wu Di, Zhou Yiqun, Li Wei, Yi Ping'an, Guo Jixun, and Zeng Wei continue to serve as the heads of their respective regions or headquarters companies. The change is that Cao Jiangwei, the general manager of the Guangzhou-Foshan Company, will replace Lu Bing. Cao Jiangwei will return to the north to be responsible for the Beijing Region, and Lu Bing will be transferred to the head of the office business department.
Behind Vanke's organizational structure adjustment this time, it is a general trend for companies to streamline and flatten management under the background of the industry's overall scale decline. According to incomplete statistics, more than 20 real estate companies have carried out organizational structure adjustments in the past two years, involving streamlining or integrating regions, reducing management levels, and strengthening the headquarters' flat management of key projects.
Seizing the "Golden September and Silver October"
(Note: The translation provided is a direct translation of the original text, and some terms may require adaptation to the English language context for full comprehension.)In the first half of this year, Vanke reported a loss in performance, with the settlement revenue from its development business falling by 34.6% year-on-year, and the settlement gross margin dropping below 10%. Looking at the regions, in the first half of the year, Vanke's development business only had a positive equity net profit in the Central China region and the Northwest region, while all other five regions were in the red. Among all regions, the Shanghai region, which has the highest revenue share, had an equity net profit of about -4.92 billion yuan, and the Beijing region had the largest loss, approximately 18.55 billion yuan.
Vanke's management stated at the performance meeting held in August that the company's net cash flow from operations in the second quarter of this year has turned positive (about 4.2 billion yuan), and the average monthly sales since the second quarter have been maintained at over 20 billion yuan, with a collection rate exceeding 100%. On the operational side, the company has recovered about 137 billion yuan through active sales, promotion of bulk transactions and resource revitalization, and a gradual exit from non-core businesses and investments; on the expenditure side, as the peak of deliveries has passed, the additional payment pressure on the operational side has decreased.
The announcement shows that in September, Vanke achieved a contract sales area of 1.231 million square meters and a contract sales amount of 17.42 billion yuan; from January to September 2024, the company has cumulatively achieved a contract sales area of 13.308 million square meters and a contract sales amount of 181.2 billion yuan.
It is worth noting that on the eve of this year's National Day holiday, the Political Bureau of the CPC Central Committee set the tone for the first time to promote the stabilization of the real estate market, and a number of major policies for the housing market were concentrated. On September 29, Guangzhou announced the cancellation of the housing purchase restriction policy; Shenzhen launched a set of "combination punches," including optimizing the housing purchase restriction policy by district, canceling the transfer restrictions on commercial housing and apartments, and adjusting the VAT exemption period from 5 years to 2 years.
Data provided by the China Index Academy shows that during this year's National Day holiday, the promotion efforts of real estate companies have generally increased, and the number of visits and subscriptions to core city properties have generally increased significantly compared to before the holiday. Some project transaction volumes have already exceeded the entire month of September. The start of "Silver October" has exceeded expectations, and there are clear signs of market stabilization. It is expected that the new policies will continue to take effect in the short term, and the significant rebound in subscription data will gradually be reflected in the online signing data. It is expected that the market sales data in October will show a significant increase.